NOW, THEREFORE, in consideration of and reliance on the foregoing Recitals (which are incorporated herein by reference), the agreements described below, and other valuable consideration, receipt and sufficiency of which are acknowledged, the Parties agree as follows:

1. GRANT OF FRANCHISE

1.1 Grant. Franchisee agrees to, at all times, faithfully, honestly, ethically, and diligently perform its obligations under this Agreement and to use its best efforts to promote its BFT Studio (the "Studio") as described herein. Accordingly, Franchisor grants to Franchisee the non-exclusive right and license to establish and operate a single Studio, offering only the Approved Services and Approved Products and utilizing only the System and the Marks, at the location identified on Exhibit 1 or as determined in accordance with Section 1.2 below (the "Authorized Location"), in accordance with the provisions and for the Term (defined below) specified in this Agreement:

Franchisee agrees not to conduct the business of its Studio at any location other than the Authorized Location and to use the Authorized Location only for the operation of its Studio. Franchisee also agrees that, once its Studio opens for business, it will continuously operate the Studio in accordance with this Agreement for the duration of the Term.

• D.

The Studio shall contain signage prominently identifying Franchisee by name as an independently owned and operated franchisee of Franchisor.

• E.

Franchisor may require that Franchisee install and operate a surveillance camera with audio at the premises of the Studio to help monitor instructor performance, quality assurance and safety.

Franchisee is responsible for complying with all Applicable Laws in connection with the use of the surveillance camera.

Franchisee acknowledges and agrees that its indemnification obligations under this Agreement include claims arising from or related to any breaches of privacy from Franchisee's use of any surveillance camera.

• F.

Franchisee must offer, accept the use of, and ensure that it and the Studio's personnel are aware of all then-current System policies and procedures related to member reciprocity amongst (a) other Studios that are part of the System, and/or (b) studios operated as part of the franchise systems in connection with the other brands owned and/or licensed by Franchisor and its affiliates.

• 7.2 Lease. Franchisee is solely responsible for purchasing or leasing a suitable site for its Studio.

Franchisee must submit the lease for the Studio to Franchisor for its written acceptance before Franchisee executes the lease for the Authorized Location.

• 6.1 General Guidance for Opening. Franchisor shall consult and advise Franchisee on the proper display of the Marks, layout and design, procurement of fitness and other equipment (such as weights, cardio equipment, heart monitors, and mats), furniture, fixtures, initial inventories, managing construction or remodeling of the Studio, and certain other items related to the development and operation of BFT Studios. After Franchisee has executed an accepted lease for the Authorized Location, Franchisor shall deliver to Franchisee specifications and standards for building, equipment, furnishings, fixtures, layout, design and signs relating to the Authorized Location and shall provide reasonable consultation in connection with the development of the Studio.

• 6.2 Training-Related Programs and Obligations. Franchisor will provide the training programs described in Section 5.5 and below, and Franchisee must, at all times during the Term, be in compliance with all training obligations described in Section 5.5 and set forth below.

• A. Initial Training Program; Designated Manager Training Program. All persons required to complete the Owner/Operator Module, the Designated Manager Training Program and the Pre-Opening Instructor Training must do so prior to engaging in any activities related to the operation of the Studio.

• 8.1 Compliance. Franchisee acknowledges and agrees that every detail regarding the appearance and operation of its Studio is important to Franchisor, Franchisee, the System and other owners and operators of BFT Studios in order to maintain high and uniform operating standards, to increase demand for the classes sold by all franchisees, and to protect Franchisor's and the System's reputation and goodwill, and, accordingly, Franchisee agrees to comply strictly at all times with the requirements of this Agreement and the System Standards (whether contained in the Learning Management System or any other written or oral communication to Franchisee by Franchisor) relating to the appearance or operation of the Studio.

• 8.2 Franchisor's Right to Inspect. To determine whether Franchisee is complying with this Agreement and the System Standards, Franchisor reserves the right, at any reasonable time and without prior notice, and subject to Applicable Laws, to inspect and assess all aspects of the Studio's appearance and operations, including the right to: (1) inspect and examine the Studio premises, fitness equipment, facilities and operation of the Studio in person; (2) interview Franchisee and Franchisee's employees and any independent contractors; (3) interview members and customers of and suppliers to the Studio and any other person with whom Franchisee does business; (4) confer with members and staff of government agencies with authority over Franchisee about matters relevant to the Studio; and (5) use "mystery shoppers," who may pose as customers.

Source: Item 23 — RECEIPTS (FDD pages 79–265)